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Property Owners `losing Touch With Mortgage Reality`


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http://www.myfinances.co.uk/mortgages/news/property-owners-%60losing-touch-with-mortgage-reality%60-$1378611.htm

Property owners across the UK do not have a realistic outlook on interest rates for mortgage deals.

This is according to new research by unbiased.co.uk, which revealed the average homeowner would only go for a fixed-rate offer if it was priced at 3.3 per cent.

The website noted this is an "unrealistic" expectation, with one in six individuals claiming they would need to secure two per cent interest on a fixed-rate deal before switching from a tracker mortgage.

According to unbiased.co.uk, the general public have become used to the Bank of England setting charges at 0.5 per cent for nearly two years, clouding their judgement.

"Their ideas of what is a reasonable fixed-rate mortgage have become distorted in the low-interest rate environment," Karen Barrett, chief executive of unbiased.co.uk, commented.

Last month, the Council of Mortgage Lenders showed there was a five per cent drop in home loan approvals in November when compared with October.

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TBH 5% is still a very low rate historically.

For the mortgage I'm willing to take on I could get 3.99% fixed for 5 years out of HSBC but woudn't take it, it's an outstandingly good rate but the prospects for my future employment don't stand up to the scrutiny. So I'll get it stuck to me at the other end when jobs are looking up but rates are ramming us all. Bvgger

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For the mortgage I'm willing to take on I could get 3.99% fixed for 5 years out of HSBC but woudn't take it, it's an outstandingly good rate but the prospects for my future employment don't stand up to the scrutiny. So I'll get it stuck to me at the other end when jobs are looking up but rates are ramming us all. Bvgger

But prices will be lower and your deposit will be higher.

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For the mortgage I'm willing to take on I could get 3.99% fixed for 5 years out of HSBC but woudn't take it, it's an outstandingly good rate but the prospects for my future employment don't stand up to the scrutiny. So I'll get it stuck to me at the other end when jobs are looking up but rates are ramming us all. Bvgger

No, over the last couple of hundred years the cost of debt has averaged 5% and the return on capital is slightly higher (5-6% I wish I could remember the link I had on this).

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I would put it another way.....property sellers have no sense of reality about the prices they are asking and how a person/buyer in this day and age will have the means, deposit or ability to borrow the unrealistic price they are asking.....

If they thought about what they had themselves borrowed to buy.....and what they are expecting a purchaser to borrow to buy it, given the relatively low wages, shortage of jobs, tighter lending and high cost of living of today.

So wake up and get real......don't expect to sell a pile, when as well as the above....property is not making capital growth/money like it used to do, a depreciating asset that costs.....so best to off load any unwanted real-estate, sit back and relax, then you could if you wanted buy back another day. ;)

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Deposit ain't gonna be higher if he isn't working.

Likely to be eroded by the cost of living.

he didn't say he wasn't working.

The value of his deposit will increase if there is deflation in house prices. Inflation of everything else would be irrelevant.

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" it's an outstandingly good rate but the prospects for my future employment don't stand up to the scrutiny"

Which bit of that didn't you understand?

Not sure what you're on about, but all that implies is that he is risk averse and doesn't want to take on a big debt if there is any risk of losing his job.

He is obviously not going to get a top rate mortgage if he is unemployed.

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For the mortgage I'm willing to take on I could get 3.99% fixed for 5 years out of HSBC

that is a good deal, HSBC are paying around 3.5% to borrow from their private customers over 5 years, that is not much of a margin for bad loans etc. They must have a printing press somewhere :-).

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Forgive my naivety mass meeja, but those with mortgages are actually not in full title of the property. Furthermore, as long as you live under this rotten monarchy you will NEVER have ownership of anything.

Those who have paid their full tuppence for a dwelling are still paying rent, forever.

Losing my patience with the media in this country. Thanks to you lot for keeping me sane.

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No, over the last couple of hundred years the cost of debt has averaged 5% and the return on capital is slightly higher (5-6% I wish I could remember the link I had on this).

With modern credit money, technology and highly liquid markets, I see no reason why rates shouldn't stay below historic averages. Rates have been falling for decades now over the whole cycles.

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No, over the last couple of hundred years the cost of debt has averaged 5% and the return on capital is slightly higher (5-6% I wish I could remember the link I had on this).

You're talking about the cost of UK sovereign debt, not mortgages rates.

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Stupid survey. They asked people at what rate they would switch to a fixed and people gave them an answer. They didn't ask at what realistic rate rate they would switch. It's like asing at what price would you buy a house, someone answers "50% off 2007 prices" and the person asking goes and writes a snidey article about how stupid people on HPC are.

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>the average homeowner would only go for a fixed-rate offer if it was priced at 3.3 per cent.

Since there is no term mentioned in the article, that shouldn't be a surprise, that is pretty close to the average mortgage rate. I would guess people would take it if its cheaper than their current rate.

I wouldn't do 3.3% fixed for one year but I would take it for 10+ years.

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Stupid survey. They asked people at what rate they would switch to a fixed and people gave them an answer. They didn't ask at what realistic rate rate they would switch. It's like asing at what price would you buy a house, someone answers "50% off 2007 prices" and the person asking goes and writes a snidey article about how stupid people on HPC are.

+1

Currently on an uncollared lifetime tracker at BoE+0.5%.

Rates could stay low for years, they could shoot up very soon. A fix would be hedging our bets. Am I honestly going to say that we'd jump ship for 5% (and then SVR after X years)? ;)

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that is a good deal, HSBC are paying around 3.5% to borrow from their private customers over 5 years, that is not much of a margin for bad loans etc. They must have a printing press somewhere :-).

It's the size of the deposit that clinches the rate, as for the others commenting, yeh I am risk averse at the tail end of the biggest bubble in history, I'll have-hopefully-a bigger real terms deposit or the possibility of buying outright, not risk averse in other areas, just don't see the logic in bailing out some other feckers bad financial choices and would rather wait and see how jobs look which neccessarily entails getting stuck with a higher rate if a mortgage is required. Hoping to be in a very strong bargaining position close to the bottom when the rush for the exits is in full swing-anothers loss is my gain :D

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